New Mortgage Plan Has Folks Buzzing

From Realty Times-- Washington Report: Mortgage Reform Bill by Kenneth R. Harney

"A massive new mortgage reform bill has Washington real estate and banking groups buzzing, both critically and in favor.

The bill was introduced last week by House financial services committee chairman Barney Frank -- who's arguably the most influential legislator on housing issues on Capitol Hill.

Supporters say the 151-page bill would have gone a long way to preventing mortgage lending excesses during the housing boom, especially no-documentation, negative amortization and zero downpayment deals, had it been federal law before the boom started in 2002 or 2003."

Here's how the bill would be different: First, lenders would be discouraged from making anything but "plain vanilla" 30-year fixed rate mortgages with full documentation and strict underwriting. Second, it would require lenders that originate other types of loans to retain at least a five percent ownership stake in the loan for its full term, even if it gets sold in the secondary mortgage bond market. Third, if the loan ultimately went bad, the originator would own a piece of the loss -- unlike today's system, where they can sell them and forget them.

Not everyone is ecstatic about the new program. Read the full story here.

For your next title order, try

Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

Sphere: Related Content